THE FINANCIAL PAGE SYNER.GY WITH THE DEVIL A year ago, progressive activists and policy wonks descended upon Cara- cas, Venezuela, for the World Social Forum, a kind of Davos conference for the global left. People packed into the Ca- racas Hilton to listen to panel discussions on the evils of neoliberalism and the threat posed by U.S. hegemony, and Hugo Chávez, the President of V enezuela, gave a speech to a crowd of some ten thousand in which he called for "socialism or death." It was a striking demonstration of Chá- vez's importance as an anti-capitalist sym- bol. And yet, only six months earlier, in the very same hotel, Chávez's government had hosted a rather different meeting of international luminaries. The attendees were American businessmen, and the meeting was a trade fair intended to con- vince American companies that Venezu- ela was friendly to foreign investment and eager to expand trade with the U.S. To people on both the left and the right, Hugo Chávez is a kind of modern- day Castro, a virulently anti-American leader who has positioned himself as the spearhead of Latin Americàs "Bolivarian revolution." He calls for a "socialism of the twenty-first century," and regularly floats radical economic ideas; during his recent campaign for reëlection, he suggested he might move Venezuela to a barter system. When he spoke in front of the United Nations General Assembly in September, a day after President Bush, he said, "The devil came here yesterday." And, just last month, after he was overwhelmingly reëlected to the Presidency, he dedicated the victory to Castro and proclaimed it "another defeat for the devil who tries to dominate the world." Chávez's rhetoric might not be out of place in "The Little Red Book," yet every- day life for many Venezuelans today looks more like the Neiman-Marcus catalogue. Thanks to the boom in the price of oil, many Venezuelans have been indulging in rampant consumerism that might give even an American pause. In the past year, auto sales have doubled, property prices have soared (mortgage loans are up three hundred per cent), and, thanks to this buy- ing frenzy, credit-card loans have nearly doubled. And while Chávez has done a good job of redistributing oil revenue to the Venezuelan poor, via so-called misio- nes, designed to improve education, health care, and housing, and has forced oil com- panies to renegotiate contracts, there has been no nationalization of industry, rela- tively little interference with markets, and only small gestures toward land reform. If this is socialism, it's the most business- friendly socialism ever devised. Even stranger, Chávez's demonization of the U.S. has had little or no impact on business between the two countries. The U.S. continues to be Venezuela's most important trading partner. Much of this business is oil: Venezuela is America's fourth-largest supplier, and the U.S. is ð ' 'X , pendence on oil, while his few tepid ven- tures into state ownership or coöperatives will have no meaningful economic im- pact. The result is that the ties between the U.S. and Venezuela have actually tightened. And there is only so much Chávez could do to loosen them without wrecking his economy; most Venezuelan oil is heavy with sulfur, and the refineries that are best equipped to handle it are in the U.S. It's far easier and cheaper to ship oil from the Orinoco Basin to Corpus Christi than to a refinery in Shanghai. In any case, it's far from clear that most Ven- ezuelans want those ties loosened at all; Venezuela has traditionally been more America-friendly than other South Amer- ican countries. Baseball is bigger in Ven- ezuela than soccer, and there are Subway and McDonald's franchises throughout the country. The paradox is that Chávezs anti- Americanism is central to his global ap- peal, while American consumers and companies are central to the economic performance of his regime. So, while hès going around the world giving speeches about how the goose should be killed, he relies on the golden eggs to keep himself in power. This may seem like a state of affairs that can't last, and Chávez's sup- porters and detractors alike assume that, soon enough, his deeds will begin to live up to his rhetoric: hèll cut off oil supplies to the U.S., or the like. But deep-seated ideological and political hostility between countries is often less of an obstacle to trade than you might think. Japan, for in- stance, is South Koreàs second-largest trading partner, despite the fact that Ko- rean resentment toward Japan runs very high, thanks to a long history ofJ apanese imperialism in the region. China, mean- while, treats Taiwan as a rebel province, and has threatened military action ifit at- tempts to declare independence, but for- eign trade between the two countries to- tals nearly sixty-five billion dollars. Trade does not, as Enlightenment thinkers like Thomas Paine believed, always bring peace in its wake, "operating to cordialize mankind." (Think, after all, of the First World War.) But the benefits of trade often excuse even the most grievous of sins. Sometimes, it just makes sense to deal with the devil. z z <( :E w z :r: c... o l- V) õ2 :r: u " Venezuela's largest customer. But the flow of trade goes both ways and across many sectors. The U.S. is the world's big- gest exporter to Venezuela, responsible for a full third of its imports. The Cara- cas skyline is decorated with Hewlett- Packard and Citigroup signs, and Ford and G .M. are market leaders there. And, even as Chávez s rhetoric has become more extreme, the two countries have be- come more entwined: trade between the U. S. and Venezuela has risen thirty-six per cent in the past year. Chávez has been the beneficiary of ex- cellent timing: oil prices have quintupled since he took over, allowing him to hand out billions of dollars to the poor. But he has done little to diversify the nation's in- dustrial base and lessen the economy's de- -James Surowiecki 26 THE NEW YORKER, JANUARY 8, 2007